On January 25, 2017, the Compensation Committee (the Committee) of the Board
of Directors of Key Energy Services, Inc. (the Company) approved the 2017 Annual Incentive Plan (the 2017 AIP) for executive officers. The 2017 AIP is a performance-based cash bonus plan for 2017 and a sub-plan under the Key Energy Services, Inc. 2016 Equity and Cash Incentive Plan.

Under the 2017 AIP, eligible
employees, including each of the named executive officers, may receive a cash bonus based upon the achievement of certain performance criteria with respect to (1) earnings before interest expense, taxes, depreciation and amortization
(EBITDA, weighted 80%), (2) safety performance (weighted 10%) and (3) free cash flow (weighted 10%). With respect to the EBITDA component, 50% is based upon achievement of an annual EBITDA target and the other 50% is based upon
achievement of quarterly EBITDA targets.

Individual target bonuses under the 2017 AIP are based on a percentage of each eligible employees base
salary. Actual bonus amounts may be earned between 0% and 126% of the applicable target. Payouts under the 2017 AIP will occur following the 2017 calendar year-end, including in respect of amounts earned based
on performance against quarterly EBITDA targets.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.

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